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House Lawmakers Grill Paulson on BofA Deal

UPDATE The hearing is over now but it's hard to say if anything about the Bank of America bailout deal is any clearer.

After listening to former Treasury Secretary Henry Paulson testify about the Bank of America bailout today, the leading Democrat and Republican representatives could agree on one thing: There are unanswered questions.

The hearing, in many ways, amounted to a stalemate.

Over and over, committee members scolded Paulson, accusing him of everything from causing the housing crisis to personally profiting from his position. The Bank of America bailout, they said, was conducted in too much secrecy.

Paulson parried the accusations. Asserting that he remains a believer in free markets, he often reminded members that the extraordinary circumstances of the financial crisis last fall demanded extraordinary efforts by the government to rescue financial firms.

Next up for the panel's investigation into the Bank of America deal are SEC and FDIC officials, who are expected to testify later this summer.

12:10 p.m.: The circumstances around the Bank of America bailout look very suspicious to House lawmakers.

Members of a House committee blasted former Treasury Secretary Henry Paulson and Bank of America Corp. chief executive Kenneth Lewis this morning, suggesting the dealmakers hid key aspects of the initial $20 billion bailout from the public and shareholders as it took shape last year.

"While all of this was going on, the American people, investors and the Congress were kept in the dark," said Rep. Edolphus Towns (D-N.Y.).

"The biggest, most powerful bankers have essentially received a free ride at taxpayers' expense," Rep. Dennis Kucinich (D-Ohio) said.

And Paulson and Fed chief Ben Bernanke were involved in a "clear pattern of deception," according to Rep. Jim Jordan (R-Ohio)

The House Committee on Oversight and Government Reform is investigating the bailout negotiations between top government officials and Bank of America after the bank threatened to scrap its deal to buy Merrill Lynch & Co.

--Peter Whoriskey

By Peter Whoriskey  |  July 16, 2009; 3:14 PM ET
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Is someone now going to apologize to Ken Lewis? Was he fairly removed from his previous position?

Posted by: politicallychallenged | July 17, 2009 1:08 PM | Report abuse

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